At the time of our investment Neville Johnson was focussed on the manufacture and installation of high-quailty bespoke home-office furniture and fitted bedroom furniture. It was one of the leading players in its market sector, with company sales of £17 million, and had a deserved reputation for the quality of its product and service.
KCP invested £4.3 million for a 58% shareholding, raising £5.3 million of debt as part of the acquisition financing. The incumbent management took a 40% shareholding.
The Company was very soon hit by the financial crash of 2008/9. However, our early assumption regarding the resilience of Neville Johnson's specific market proved to be correct and the Company experienced only a relatively mild downturn with sales falling by just 6%.
From that point on, the Company recovered rapidly and with our assistance expanded its business by establishing a new product area of staircase renovations and renewals as well as acquiring Tom Howley, a small high-quality kitchen manufacturer and retailer, out of administration.
At the time of the acquisition, Tom Howley traded from three showrooms and had sales of only £1.5 million. The business was quickly turned around and the sales run-rate at the time of exit in 2014 was £12 million from six showrooms with a long-term potential of thirty showrooms.
During our investment we:
The business was sold for £21.6 million in a secondary management buyout to Alcuin Private Equity in May 2014. At the time, the business was making £3.3 million EBITDA from sales of £33 million and with a very strong growth trajectory on the back of the Tom Howley showroom rollout and continued growth in staircases.